The Organization for Economic Co-operation and Development (OECD) published a new forecast for Israel’s economy, maintaining its GDP growth estimate for 2025 at 3.3%, higher than the forecasts of the Ministry of Finance and the Bank of Israel (3%).
At the same time, the OECD forecast for 2026 is 4.9%, which is lower than the 5.2% forecast from the Ministry of Finance and the Bank of Israel.
In fact, in the medium term, the forecasts of all three structures are similar.
The OECD notes a decrease in the intensity of hostilities following the release of the hostages and the ceasefire agreement, and expects an increase in economic activity.
At the same time, the organization estimates that by the end of 2026 the inflation rate will still remain relatively high – 2.4%, compared to the Bank of Israel forecast of 2.2%.
Agency analysts do not believe in Finance Minister Bezalel Smotrich’s promise to keep the state budget deficit within 3.2% of GDP, and estimate it at 4.1% at the end of 2026 due to high defense spending.